EOFY planning tips: Give your finances a boost

As we approach 30 June 2020, and subsequently provide information on our EOFY planning tips, we are mindful that some of us may be in a different financial situation than last year due to the COVID-19 pandemic.

Given this, we have also included information that may be beneficial in this respect. However, as with any of the tips provided below, it’s vital to assess the relevance to your personal circumstances before taking action.

EOFY planning tips

Contribute to your super

Making concessional contributions (and potentially using the carry-forward provision if your 30 June 2019 total super balance was below $500,000) could help reduce your personal income tax now, and provide for your retirement.

Concessional contributions cap

Financial year

Contributions cap amount per year

2019/20

$25,000

Carry-forward provision (as an example)

Financial year

Total super balance (at 30/06/19)

Unused cap carried forward from 2018/19 financial year

Carried forward cap available (at 01/07/19)

2019/20

< $500,000

Up to $25,000

Up to $50,000

Please click here for further information on concessional contributions and eligibility.

Making non-concessional contributions (and potentially using the bring-forward rule) could help provide for your retirement. And, you may be eligible for the Government co-contribution (up to $500).

Non-concessional contributions cap

Financial year

Total super balance (at 30/06/19)

Contributions cap amount per year

2019/20

< $1.6 million

$100,000

$1.6 million +

Nil

Bring-forward rule

Financial year

Total super balance (at 30/06/19)

Contributions cap amount (including bring-forward)

Bring-forward period

2019/20

< $1.4 million

$300,000

3 years

$1.4 million to < $1.5 million

$200,000

2 years

$1.5 million to < $1.6 million

$100,000

1 year

$1.6 million +

Nil

N/A

Please click here for further information on non-concessional contributions and eligibility.

Contribute to your spouse’s super

Splitting up to 85% of your concessional contributions in the previous financial year with your spouse (contribution splitting) could help provide for your spouse’s retirement. Contribution splitting could also be an important consideration given the transfer balance cap.

Please click here for further information on contribution splitting and eligibility.

Making non-concessional contributions for your spouse (spouse contributions) could help provide for your spouse’s retirement. And, you may be eligible for the spouse contribution tax offset (up to $540), which could help reduce your personal income tax now. Spouse contributions could also be an important consideration given the transfer balance cap.

Please click here for further information on spouse contributions and eligibility.

Withdraw from your super

Accessing your super through the new, temporary condition of release, ‘COVID-19 early release of super’, could help provide extra cash flow if you are currently experiencing financial difficulty. However, please consider the potential impact on your retirement when doing so – and, any potential impact on your insurance arrangements in super.

COVID-19 early release of super

Financial year

Withdrawal cap amount

2019/20

Up to $10,000 tax-free

Please click here for further information on ‘COVID-19 early release of super’ and eligibility.

Meet your account-based pension payment obligations

Taking your minimum annual pension payment requirements will help provide for your present and future needs. However, temporary changes for the 2019/20 financial year (and the 2020/21 financial year), reduce the minimum annual payment due to the impact of the COVID-19 pandemic.

Taking out private health insurance could help reduce your Medicare levy surcharge. And, if applicable, you may find that you could avoid, or reduce, the impact of the lifetime health insurance cover loading.

Medicare levy surcharge (MLS)

Financial year

Singles

Families*

MLS rate

2019/20

< $90,001

< $180,001

0%

$90,001 to $105,000

$180,001 to $210,000

1.0%

$105,000 to $140,000

$210,001 to $280,000

1.25%

$140,001 +

$280,001 +

1.5%

*The thresholds for families increase by $1,500 for each MLS dependent child after the first.

Please click here for further information on private health insurance and MLS.

Other considerations

Given, for example, the recent change to the social security deeming rates (effective from 1 May 2020), this could be an appropriate time to reassess your eligibility for social security entitlements, such as the Age Pension or the Commonwealth Seniors Health Card. And, from an ‘EOFY’ time-sensitive perspective, if you are a recipient/holder of one of these entitlements on 10 July 2020, you could be eligible for the Government’s second $750 support payment.

Moving forward

With the end of financial year on the horizon, it’s important to review areas of your personal finances, and take action if applicable, before 30 June. Doing so could give your personal finances a much-needed boost.

By seeking professional advice, an assessment can be made as to the EOFY planning tips that may be appropriate for you, based on your personal circumstances. Importantly, we can help with this.

The information provided on this Knowledge Centre is general advice only. It has been prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. RI Advice Group Pty Ltd ABN 23 001 774 125; AFSL 238429.